During the third quarter of 2023, developers connected 4.1 GW of utility-scale solar power capacity to US electric grids. This was more than double the 1.9 GW of solar capacity installed in Q3 2022. In percentage terms, solar installations have increased 107% year-over-year.
This surge in capacity indicates a recovery for an industry that faced challenges due to inflation and supply chain constraints. So far in 2023, developers have connected 10.3 GW of solar power capacity to US electric grids. This is a 36% increase from the 7.6 GW energized in the first three quarters of 2022.
As of August, the total utility-scale solar capacity in the US was approximately 80 GW, as reported by the US Energy Information Administration (EIA). The EIA also predicted that solar energy output will surpass that of hydroelectric power in 2024.
Federal incentives, including investment tax credits and financing from the US Energy Department, have sparked competition among developers to secure positions in interconnection queues. The 2022 Inflation Reduction Act provides developers a 30% tax credit on solar farm construction. The tax credit rises to 40% if developers source enough US building materials.
Upcoming solar projects
As of the end of the quarter, the five-year pipeline for new solar energy projects amounted to almost 204 GW. According to S&P Global, around half of this capacity is in the early development phase. In addition, there are 54.5 GW of announced projects, 37.7 GW of projects under construction, and 10.3 GW of projects in the advanced development phase.
During the third quarter, developers unveiled six new proposals for solar farms. These proposals have a combined capacity of 241 MW and estimated construction costs of approximately $360.8 million.
One of the largest proposals in the quarter came from Alpin Sun, a German company with operations in Texas, which proposed the 150-MW Matador Solar Project in Mahoning County, Ohio. Aypa Power LLC, a subsidiary of Blackstone Inc., proposed the second-largest project, the 47-MW Summit Ridge Solar Project in Wasco County, Oregon.
Solar’s bright future
The US is not the only part of the world where solar installations are surging. Solar companies will install 58 GW of new capacity in Europe this year, a 30% rise from 2022.
In addition, solar installations will likely keep surging even if government tax incentives are removed.
Researchers from University College London and the University of Exeter predict that even without further government support, solar energy will make up over 50% of global energy production by 2050. Solar will surge because solar generation costs will decline 60% between 2020 and 2050.
Image Source: S.L. Kanthan